Maruti Suzuki India Ltd.: What is bothering Maruti? Rahul Shah answers

Has the rally stalled in the near term because of the sensitivity to the US bond yields and what is happening in global markets? Would you advise caution or would you say a good buying opportunity?
We are just following the global trend and obviously that domestic recovery and economic scenario. Near term, for every selloff, we have seen a smart recovery in the markets. The sectors will keep rotating. Earlier it was IT, in Jan-Feb we saw IT stocks replacing the old economy stocks in the front seat, then the PSU basket came up. This will keep rotating. So, there will be an opportunity. In all these spaces, wherever we find opportunity, we need to put our bucks in.Near term or next quarter, one should look at all the sell-offs as opportunities for buying.

Let us talk about the positioning of something like Maruti. It has not done very well in the last couple of months and is stuck in and around Rs 7.000. What is bothering Maruti?
When the markets saw a selloff, the stock did not get hammered the way the other stocks got it. So looking at the company’s valuations, my view is that the market is thinking there is no major shakeup in the stock right now or coming up in next few quarters vis-à-vis two-wheelers or commercial space. That is the reason Maruti is moving sideways and underperforming in the near term.

What is the outlook when it comes to the primary markets? Anything in the pipeline or recent listings that you are looking at closely? Would you have a comment on Nazara Tech too?
We have seen a fantastic run of IPOs which have been listed. They have seen decent listing gains. Most of them have been fully priced in and there is very little for the investors to look at going forward. So most of the IPOs are played for a listing gain. I do not think any IPOs which look interesting post the listing in recent times are fully valued. So the listed space looks much better rather than getting into newer ones. I have not gone through Nazara and will not be able to comment on it.

How are you looking at playing the consumption names that are related to travel and hospitality space like and the space as a whole?
I think of the entire basket as pre-Covid and post Covid. They have a decent rally in the entire hospitality sector. IRCTC and maybe a few of the hotel names will continue to do well. Hotels have a lot of deep value and there was good demand in December as well as January. Hotel stocks should continue to do well but there will be a lot of other opportunities.

I would still be underweight on all these stocks. I am rather overweight on the sectors the market is focusing right now.